Why 'Buy Canadian' Makes Sense
by Ken Lewenza
National President, Canadian Auto Workers.
- First Posted: Nov 09 2011 00:07 AM
The Harper government's shipbuilding contracts are a welcome reversal of policy and a sound investment.
Canada’s beleaguered shipbuilding industry is going to receive a $35- billion facelift over the next 30 years. The Harper government is making good on a promise to build new naval, coast guard, and icebreaker vessels. This record-breaking government purchase under the National Shipbuilding Procurement Strategy will create and secure 15,000 jobs at the Halifax and Vancouver shipyards, as well as countless other supplier and spin-off jobs.
This is welcome news for an industry that has faced many years of uncertainty.
Fierce global competition and a skyrocketing trade deficit – thanks to mounting imports and declining exports – contributed to decades of lay-offs, claiming the jobs of one in every two shipbuilders since 1992.
Canadian shipbuilding is among the sector's hardest hit by neo-liberal economic policies, marked by free trade and government’s “hands-off” approach to investment and sector development.
Ironically, it’s the Harper government that has chosen to break its own ideological mould, by attaching strict “Made in Canada” rules to this major purchase. No foreign competitors were eligible to bid on these contracts. All of the associated economic benefits have been earmarked to stay within Canadians borders.
This is certainly an odd twist for Prime Minister Stephen Harper and his cabinet, who have enthusiastically and relentlessly opposed any serious “Made in Canada” public-purchasing policy since winning office in 2006. Restricting the ability of corporations to choose where to produce a good or service, often where profits are highest, is anathema to Harper’s economic ethos.
Prior to the ship purchase, Harper – and his trade ministers – had dismissed countless proposals made by unions, civil-society organizations, municipalities, and opposition politicians to establish buy-Canadian rules that ensure at least some of the economic benefits of public funding – put towards things like transportation equipment – are enjoyed by Canadians.
In fact, the Tories have embarked on an ambitious free-trade accord with Europe that would strip the rights of provincial and municipal governments from utilizing buy-local policies, for good.
Harper’s cynicism about buy-domestic policies climaxed in February of 2010, when the prime minister infamously denounced U.S. President Barack Obama’s “Buy America” stimulus-spending rules. He argued these protectionist measures would pose a “huge risk” to the global-economic recovery. Harper’s doomsayer approach wasn’t convincing, especially since there is widespread use, and general acceptance, of buy-national policies from the United States to Europe, and throughout Asia.
No current piece of international trade policy says they can’t be used, in some form. Nevertheless, Harper has consistently sided with free-market orthodoxy in matters of economic policy. In 2009, the Tories awarded a $274-million military truck contract to a foreign supplier, while a Chatham, Ont., truck plant was desperate for new work. This storyline has been repeated far too many times throughout Canadian history, whether for the purchase of new buses, rail cars, or even Olympic team uniforms. Billions of dollars have been squandered.
That’s what makes the recent "Made in Canada" shipbuilding purchase so abnormal for the Harper government. It flies in the face of their economic program. In fact, it offers a good example of how a "Made in Canada" approach can play an important role in developing our strategic industrial sectors.
Not only will this multi-billion-dollar public investment produce new vessels, through capital upgrades and expansions, it will also help re-situate Canada among global shipbuilding leaders. Increased productive capacity and technological improvements will also mean Canada can better compete with shipbuilding nations like Norway and South Korea for international work.
Investment dollars will also rebuild hard-hit communities and put skilled-trades workers, including hundreds if not thousands of young workers, back on the job. This translates into hundreds of millions returning to the government by way of tax dollars – more still if we consider the spin-off economic activity. It’s a win-win.
Unfortunately, the success of this purchasing program for Canada appears to be more of an anomaly, rather than a strategic change in political direction. Instead of rightfully championing this "Made in Canada" approach, and perhaps exploring other areas in government where similar policies might make good economic sense, the Harper government’s simply fallen back on old habits. They’ve openly criticized Obama’s inclusion of "Buy America" provisions in the proposed U.S. jobs bill in recent weeks, calling the policy move “regrettable.”
This public criticism reeks of hypocrisy by the Harper government. It also re-opens the same old and tired ideological debate that pits neo-liberal, “free-market” policies against “protectionism.”
On that debate, the ship has certainly sailed. And even Stephen Harper knows it.
Photo courtesy of Reuters
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